Professional Documents
Culture Documents
Minimum Support Price
Minimum Support Price
Minimum Support Price
MSP is the minimum price which the government pays for the farmers’
produce at the time of procurement. It is aimed at saving the crops from
price fluctuations in the market.
History of MSP
MSPs were first introduced in 1966-67 when the country adopted Green
Revolution technologies. To boost the domestic production and encourage
farmers to plant the high yielding varieties, the government resorted to
MSP. A minimum support price was guaranteed to them.
A2 which covers all the cash and kind expenses of the farmers.
A2+FL which takes into account the estimated value of the unpaid
labour of family members.
C2 which includes A2+FL along with the interests foregone.
1. Paddy
2. Jowar
3. Bajra
4. Maize
5. Ragi
6. Tur (Arhar)
7. Moong
8. Urad
9. Cotton
10. Groundnut
11. Sunflower seed
12. Soya bean
13. Sesamum
14. Niger seed
15. Wheat
16. Barley
17. Gram
18. Masur (Lentil)
19. Rapeseed and Mustard
20. Safflower
21. Toria
22. Jute
23. Coconut – Copra and De-Husked Coconut
Why MSP is needed?
To safeguard farmers from the market price fluctuations.
The prices of farm commodities are dependent on various factors
such as good harvest season which leads to fall in prices.
In such cases, farmers might not prefer to sow the aforesaid crop
next season. MSPs would encourage farmers to sow these crops and
thereby maintain a healthy supply.
The second bill i.e., the Farmers’ agreement on price assurance and farm
services bill has provisions regarding the contract farming. It gives the
farmers an opportunity to strike a deal with corporates even before the
production. This shifts the risk from farmers onto the businessmen and also
the farmers will be assured of a fixed price.
1. 1, 2, 3 and 7 only
2. 2, 4, 5 and 6 only
3. 1, 3, 4, 5 and 6 only
4. 1, 2, 3, 4, 5, 6 and 7